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Published on Tuesday, August 18, 2015

Labor Department proposes changes to overtime rules

The U.S. Department of Labor has proposed changes to the Fair Labor Standards Act (FLSA) that would extend overtime protection to millions of workers by increasing the salary threshold at which workers are eligible for overtime. The FLSA establishes minimum wage and overtime pay standards affecting workers in the private sector and in federal, state and local governments. As a general rule under the FLSA, unless they are exempt, workers must be paid at least one and one-half times their regular rate of pay for any hours they work beyond 40 in a work week. Under the "white collar" exemption, certain executive, administrative, and professional employees are excluded from the FLSA's minimum wage and overtime protections. To qualify for the exemption, a white collar employee "generally" must:

primarily perform executive, administrative, or professional duties as provided in the Department's regulations (duties tests).

The proposed rule would nearly double the salary threshold at which workers would earn overtime pay whenever they worked more than 40 hours in a week. Under the proposed rule change the salary threshold would go from $23,660 a year to $47,892 a year. For additional information about the proposed rule, click here.

Besides changes to the salary threshold test, the department is seeking comments on whether the current "duties tests" are working as intended to screen out workers who are not bona fide "white collar" exempt workers. It also seeks comments on the possibility of including nondiscretionary bonuses to satisfy a portion of the standard salary requirement. Comments are due on or before September 4, 2015.

The National League of Cities (NLC) is preparing to submit comments. AWC is interested in coordinating our responses to this proposal. If your city considering filing comments in this proceeding and/or has collected information regarding the specific impact the changes would have on your local government, please send an email to candiceb@awcnet.org or serenad@awcnet.org.